Weinshenk v. Sullivan

• Decision Date: 05 January 1937
• Docket Number: No. 23858.,23858.
• Citation: 100 S.W.2d 66
• Parties: WEINSHENK v. SULLIVAN.
• Court: Missouri Court of Appeals

100 S.W.2d 66

WEINSHENK v. SULLIVAN.

No. 23858.

St. Louis Court of Appeals. Missouri.

January 5, 1937.

Rehearing Denied January 22, 1937.

Appeal from Circuit Court, St. Louis County; Julius R. Nolte, Judge.

"Not to be published in State Reports."

Action by Maurice T. Weinshenk against William L. Sullivan. Judgment for plaintiff, and defendant appeals.

Affirmed.

Herbert E. Bryant, of St. Louis, for appellant.

Blackinton, Reid & Harris and Charles A. Powers, all of St. Louis, for respondent.

SUTTON, Commissioner.

Plaintiff instituted this action in the circuit court of St. Louis county on June 16, 1933, to recover $962.19 for services rendered by him as attorney for the defendant.

Plaintiff alleges in his petition that he is a licensed and practicing attorney at law and a resident of Chicago, and that defendant is a resident of St. Louis; that on June 21, 1932, defendant retained plaintiff as attorney to represent him in a pending United States income tax assessment for the year 1930; that the contract of retainer provided that plaintiff should be entitled to a fee equal to 25 per cent. of whatever savings were accomplished for the defendant; that on or about September 5, 1932, the United States Treasury Department made a tax assessment against the defendant in the sum of $6,139.56, plus statutory interest, in the amount of $760.60, a total of $6,900.16; that subsequently plaintiff prepared schedules and statements, protests, and petitions, which were filed with the Government in behalf of the defendant, and performed all other necessary services as attorney and counselor for the defendant; that as a result of the plaintiff's efforts and legal services, said tax assessment for the year 1930 was reduced from $6,900.16 to $949.29, with interest in the amount of $102.10, a total of $1,051.39, the last assessment being made by the Government on January 25, 1933; that the total net savings to the defendant were $5,848.77, and that thereupon in accordance with said contract between plaintiff and defendant plaintiff became entitled to a fee of $1,462.19, being 25 per cent. on said total net savings; that on February 2, 1933, the defendant paid plaintiff the sum of $500, leaving a balance due plaintiff of $962.19.

The trial, with a jury, resulted in a verdict and judgment in favor of plaintiff for $962.19, and defendant appeals.

The evidence on behalf of the plaintiff shows that, in June, 1932, during a conference at plaintiff's office in Chicago, defendant told plaintiff that he was having trouble with the United States internal revenue office in St. Louis; that he had been working with them for several months regarding his income tax assessment for the year 1930; that he had not had his letter from the Government at that time definitely fixing his assessment, but that he thought the assessment would be upwards of $2,000; that plaintiff told defendant that he would handle his case on the basis of 25 per cent. on any savings he might effect for him when the assessment came through, and that if there was no additional assessment there would be no fee, and that if defendant was able to handle it in St. Louis himself and he was satisfied with the way the case terminated, there would be no fee, but that if on the other hand the Government did give him an assessment and he did require plaintiff's services, then plaintiff would take the case on the basis of 25 per cent. of the savings effected; and that the defendant said he was satisfied to pay that.

On September 5, 1932, defendant received from the St. Louis office of the United States Treasury Department, Internal Revenue Service, the following letter:

"The recommendations which this office proposes to make with respect to your income tax liability as the result of a recent examination by an internal revenue agent are shown in the statement attached.

"If you acquiesce in the proposed tax liability the inclosed Form 870 should be executed and forwarded to this office. Your consent on Form 870 to the prompt assessment of any deficiency indicated will stop the running of interest to be assessed on such deficiency under the provisions of section 283 (d) of the Revenue Act of 1926 (44 Stat. 63) or section 292 of the Revenue Act of 1928 (26 U.S.C.A. § 292 and note), upon a date not later than thirty days after the filing of Form 870 properly executed. Unless such consent is filed the interest to be assessed under the law upon any deficiency indicated runs to the date the deficiency is assessed and the assessment may be made only as provided by section 274 (a) of the Revenue Act of 1926 (44 Stat. 55) and/or section 272 (a) of the Revenue Act of 1928 (26 U.S.C.A. § 272 note).

"Should you desire to make immediate payment without awaiting formal assessment and notice and demand, you should communicate with the collector of internal revenue at St. Louis, Missouri, inclosing this letter, or a copy thereof. If payment is so made the interest period will terminate on the date of payment.

"If you do not acquiesce in the proposed recommendations you should file a protest in writing with this office within 20 days from the date of this letter. Any protest so filed will be given careful consideration, and, if you so desire, you will be given an opportunity for a hearing before the recommendations are forwarded to Washington.

"Arrangements will be made by this office upon your request to answer any questions which may occur to you in your review of these recommendations.

"In any event please sign the inclosed form acknowledging receipt of this letter and related papers and return such form to this office."

The attached statement, which purports to be a report of an internal revenue agent to the St. Louis office of the Treasury Department, Internal Revenue Service, is as follows: "An examination of the books and records of W. L. Sullivan for the year 1930 disclosed the necessity of adjustments in connection with the tax liability, as follows: Year 1930, additional tax $6,139.56, net result $6,139.56."

There were inclosed with said letter and attached statement calculations showing how the additional tax was computed.

On September 19, 1932, these papers were mailed by defendant to the plaintiff, inclosed with a letter as follows: "Enclosed are documents from the Department of Internal Revenue. If you think it well to make a request for a hearing and need my sworn statement, please send the necessary papers."

After receiving this letter, with the papers inclosed, plaintiff decided not to file protest with the St. Louis office of the Treasury Department, but to wait for the thirty-day letter to come through from Washington. He, however, studied the papers, prepared schedules, including an outline, and prepared a memoranda brief of what to incorporate in the protest when the thirty-day letter came from Washington.

On October 31, 1932, defendant received from the Treasury Department at Washington a letter dated October 28, 1932, as follows:

"The recommendations of the revenue agent, resulting in a deficiency of $6,139.56 of income tax for the year 1930 have been approved by this office. If it is not your desire to protest the determination of your income tax liability as set forth in the revenue agent's report, you are requested to execute the enclosed form and forward it to the Commissioner of Internal Revenue, Washington, D. C., for the attention of IT:AR:C-1-CEJ. The signing of this form will expedite the closing of your return by permitting an early assessment of any deficiency and preventing the accumulation of interest charges, since the interest period terminates thirty days after filing the enclosed form, or on the date assessment is made, whichever is earlier; whereas if this form is not filed, interest at the rate of 6% per annum will accumulate.

"If, however, you desire to protest this determination, you are granted fifteen days from the date of this letter within which to file your protest in writing against the income tax liability proposed herein. The protest and any additional statements of facts must be executed in triplicate, under oath, and contain, (a) the name and address of the taxpayer (in the case of an individual, the residence, and in the case of a corporation, the principal office or place of business); (b) in the case of a corporation, the name of the State of incorporation; (c) the designation by date and symbol of the letter advising of the proposed deficiency with respect to which the protest is made; (d) the designation of the year or years involved and a statement of the amount of tax in dispute for each year; (e) an itemized schedule of the findings to which the taxpayer takes exception; (f) a summary statement of the grounds upon which the taxpayer relies in connection with each exception setting forth details of facts, figures and all material evidence available to taxpayer; and (g) in case the taxpayer desires a hearing, a statement to that effect.

"Since it is desired to bring this matter to a satisfactory conclusion as promptly as possible, an early reply to this letter will be appreciated. If no reply is received within the period of...